Exhibit 1.1
Shares
MASTECH CORPORATION
Common Stock
UNDERWRITING AGREEMENT
----------------------
__________, 1996
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
XXXXX & COMPANY
XXXXXXXXXX SECURITIES
XXXXXX/HUNTER INCORPORATED
As representatives of the
several underwriters
named in Schedule I hereto
c/x Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Mastech Corporation, a Pennsylvania corporation (the "Company"), and
the stockholders of the Company named in Schedule II hereto, (collectively, the
"Selling Stockholders"), severally propose to sell an aggregate of __________
shares of common stock, par value $.01, of the Company (the "Firm Shares"), to
the several underwriters named in Schedule I hereto (the "Underwriters"). The
Firm Shares consist of __________ shares to be issued and sold by the Company
and __________ outstanding shares to be sold by the Selling Stockholders. The
Company also proposes to issue and sell to the several Underwriters not more
than __________ additional shares of common stock, par value $.01, of the
Company (the "Additional Shares"), if requested by the Underwriters as provided
in Section 2 hereof. The Firm Shares and the Additional Shares are herein
collectively called the Shares. The shares of common stock of the Company to
be outstanding after giving effect to the sales contemplated hereby are
hereinafter referred to as the Common Stock. The Company and the Selling
Stockholders are hereinafter collectively called the Sellers.
1. Registration Statement and Prospectus. The Company has prepared and
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filed with the Securities and Exchange Commission (the "Commission") in
accordance
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with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively called the
"Act"), a registration statement on Form S-1 including a prospectus relating to
the Shares, which may be amended. The registration statement, as amended at
the time when it becomes effective, including a registration statement (if any)
filed pursuant to Rule 462(b) under the Act increasing the size of the offering
registered under the Act and information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Act, is hereinafter referred to as the Registration Statement; and the
prospectus in the form first used to confirm sales of Shares is hereinafter
referred as the Prospectus.
2. Agreements to Sell and Purchase. On the basis of the representations
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and warranties contained in this Agreement, and subject to its terms and
conditions, (i) the Company agrees to issue and sell __________ Firm Shares,
(ii) each Selling Stockholder agrees, severally and not jointly, to sell the
number of Firm Shares set forth opposite such Selling Stockholder's name in
Schedule II hereto, and (iii) each Underwriter agrees, severally and not
jointly, to purchase from each Seller at a price per share of $______ (the
"Purchase Price") the number of Firm Shares (subject to such adjustments to
eliminate fractional shares as you may determine) which bears the same
proportion to the total number of Firm Shares to be sold by such Seller as the
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule I hereto bears to the total number of Firm Shares.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, (i) each Selling Stockholder
agrees, severally and not jointly, to sell the number of Additional Shares set
forth opposite such Selling Stockholder's name in Schedule __ hereto, and (ii)
the Underwriters shall have the right to purchase, severally and not jointly, up
to an aggregate __________ Additional Shares from such Selling Stockholders at
the Purchase Price. Additional Shares may be purchased solely for the purpose
of covering over-allotments made in connection with the offering of the Firm
Shares. The Underwriters may exercise their right to purchase Additional
Shares in whole or in part from time to time by giving written notice thereof to
the Company within 30 days after the date of this Agreement. You shall give any
such notice on behalf of the Underwriters and such notice shall specify the
aggregate number of Additional Shares to be purchased pursuant to such exercise
and the date for payment and delivery thereof. The date specified in any such
notice shall be a business day (i) no earlier than the Closing Date (as
hereinafter defined), (ii) no later than ten business days after such notice has
been given and (iii) no earlier than two business days after such notice has
been given. If any Additional Shares are to be purchased, each Underwriter,
severally and not jointly, agrees to purchase from the Company the number of
Additional Shares (subject to such adjustments to eliminate fractional shares as
you may determine) which bears the same proportion to the total number of
Additional Shares to be purchased from the Company as the number of Firm Shares
set forth opposite the name of such Underwriter in Schedule I bears to the total
number of Firm Shares.
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The Sellers hereby agree, severally and not jointly, and the Company shall,
concurrently with the execution of this Agreement, deliver an agreement executed
by (i) each of the directors and officers of the Company who is not a Selling
Stockholder and (ii) each stockholder listed on Annex I hereto, pursuant to
which each such person agrees, not to offer, sell, contract to sell, grant any
option to purchase, or otherwise dispose of any common stock of the Company or
any securities convertible into or exercisable or exchangeable for such common
stock or in any other manner transfer all or a portion of the economic
consequences associated with the ownership of any such common stock, except to
the Underwriters pursuant to this Agreement, for a period of ___ days after the
date of the Prospectus without the prior written consent of Xxxxxxxxx, Xxxxxx &
Xxxxxxxx Securities Corporation. Notwithstanding the foregoing, during such
period (i) the Company may grant stock options pursuant to the Company's
existing stock option plan and (ii) the Company may issue shares of its common
stock upon the exercise of an option or warrant or the conversion of a security
outstanding on the date hereof.
3. Terms of Public Offering. The Sellers are advised by you that the
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Underwriters propose (i) to make a public offering of their respective portions
of the Shares as soon after the effective date of the Registration Statement as
in your judgment is advisable and (ii) initially to offer the Shares upon the
terms set forth in the Prospectus.
4. Delivery and Payment. Delivery to the Underwriters of and payment for
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the Firm Shares shall be made at 10:00 A.M., New York City time, on the third or
fourth business day unless otherwise permitted by the Commission pursuant to
Rule 15c6-1 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") (the "Closing Date") following the date of the initial public offering, at
such place outside the State of New York as you shall designate. The Closing
Date and the location of delivery of and the form of payment for the Firm Shares
may be varied by agreement between you and the Sellers.
Delivery to the Underwriters of, and payment for, any Additional Shares to
be purchased by the Underwriters shall be made at such place as you shall
designate at 10:00 A.M., New York City time, on the date specified in the
applicable exercise notice given by you pursuant to Section 2 (an "Option
Closing Date"). Any such Option Closing Date and the location of delivery of
and the form of payment for such Additional Shares may be varied by agreement
between you and the Company.
Certificates for the Shares shall be registered in such names and issued in
such denominations as you shall request in writing not later than two full
business days prior to the Closing Date or an Option Closing Date, as the case
may be. Such certificates shall be made available to you for inspection not
later than 9:30 A.M., New York City time, on the business day next preceding the
Closing Date or an Option Closing Date, as the case may be. Certificates in
definitive form evidencing the Shares shall be delivered to you on the Closing
Date or an Option Closing Date, as the case may be, with any transfer taxes
thereon duly paid by the respective Sellers, for the respective accounts of the
several Underwriters, against payment of the Purchase Price therefor by wire
transfer of same day funds to the order of the applicable Sellers.
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5. Agreements of the Company. The Company agrees with you:
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(a) To use its best efforts to cause the Registration Statement to
become effective at the earliest possible time.
(b) To advise you promptly and, if requested by you, to confirm such
advice in writing, (i) when the Registration Statement has become effective and
when any post-effective amendment to it becomes effective, (ii) of any request
by the Commission for amendments to the Registration Statement or amendments or
supplements to the Prospectus or for additional information, (iii) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the suspension of qualification of the Shares for
offering or sale in any jurisdiction, or the initiation of any proceeding for
such purposes, and (iv) of the happening of any event during the period referred
to in paragraph (e) below which makes any statement of a material fact made in
the Registration Statement or the Prospectus untrue or which requires the making
of any additions to or changes in the Registration Statement or the Prospectus
in order to make the statements therein not misleading. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal or lifting of such order at the earliest possible time.
(c) To furnish to you, without charge, five signed copies of the
Registration Statement as first filed with the Commission and of each amendment
to it, including all exhibits, and to furnish to you and each Underwriter
designated by you such number of conformed copies of the Registration Statement
as so filed and of each amendment to it, without exhibits, as you may reasonably
request.
(d) Not to file any amendment or supplement to the Registration
Statement, whether before or after the time when it becomes effective, or to
make any amendment or supplement to the Prospectus of which you shall not
previously have been advised or to which you shall reasonably object; and to
prepare and file with the Commission, promptly upon your reasonable request, any
amendment to the Registration Statement or supplement to the Prospectus which
may be necessary or advisable in connection with the distribution of the Shares
by you, and to use its best efforts to cause the same to become promptly
effective.
(e) Promptly after the Registration Statement becomes effective, and
from time to time thereafter for such period as in the opinion of counsel for
the Underwriters a prospectus is required by law to be delivered in connection
with sales by an Underwriter or a dealer, to furnish to each Underwriter and
dealer as many copies of the Prospectus (and of any amendment or supplement to
the Prospectus) as such Underwriter or dealer may reasonably request.
(f) If during the period specified in paragraph (e) any event shall
occur as a result of which, in the opinion of counsel for the Underwriters it
becomes necessary
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to amend or supplement the Prospectus in order to make the statements therein,
in the light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if it is necessary to amend or supplement the
Prospectus to comply with any law, forthwith to prepare and file with the
Commission an appropriate amendment or supplement to the Prospectus so that the
statements in the Prospectus, as so amended or supplemented, will not in the
light of the circumstances when it is so delivered, be misleading, or so that
the Prospectus will comply with law, and to furnish to each Underwriter and to
such dealers as you shall specify, such number of copies thereof as such
Underwriter or dealers may reasonably request.
(g) Prior to any public offering of the Shares, to cooperate with you
and counsel for the Underwriters in connection with the registration or
qualification of the Shares for offer and sale by the several Underwriters and
by dealers under the state securities or Blue Sky laws of such jurisdictions as
you may request, to continue such qualification in effect so long as required
for distribution of the Shares and to file such consents to service of process
or other documents as may be necessary in order to effect such registration or
qualification.
(h) To mail and make generally available to its stockholders as soon
as reasonably practicable an earnings statement covering a period of at least
twelve months after the effective date of the Registration Statement (but in no
event commencing later than 90 days after such date) which shall satisfy the
provisions of Section 11(a) of the Act, and to advise you in writing when such
statement has been so made available.
(i) During the period of five years after the date of this Agreement,
(i) to mail as soon as reasonably practicable after the end of each fiscal year
to the record holders of its Common Stock a financial report of the Company and
its subsidiaries on a consolidated basis (and a similar financial report of all
unconsolidated subsidiaries, if any), all such financial reports to include a
consolidated balance sheet, a consolidated statement of operations, a
consolidated statement of cash flows and a consolidated statement of
shareholders' equity as of the end of and for such fiscal year, together with
comparable information as of the end of and for the preceding year, certified by
independent certified public accountants, and (ii) to mail and make generally
available as soon as practicable after the end of each quarterly period (except
for the last quarterly period of each fiscal year) to such holders, a
consolidated balance sheet, a consolidated statement of operations and a
consolidated statement of cash flows (and similar financial reports of all
unconsolidated subsidiaries, if any) as of the end of and for such period, and
for the period from the beginning of such year to the close of such quarterly
period, together with comparable information for the corresponding periods of
the preceding year.
(j) During the period referred to in paragraph (i), to furnish to you
as soon as available a copy of each report or other publicly available
information of the Company mailed to the holders of Common Stock or filed with
the Commission and such other publicly available information concerning the
Company and its subsidiaries as you may reasonably request.
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(k) To pay all costs, expenses, fees and taxes incident to (i) the
preparation, printing, filing and distribution under the Act of the Registration
Statement (including financial statements and exhibits), each preliminary
prospectus and all amendments and supplements to any of them prior to or during
the period specified in paragraph (e), (ii) the printing and delivery of the
Prospectus and all amendments or supplements to it during the period specified
in paragraph (e), (iii) the printing and delivery of this Agreement, the
Preliminary and Supplemental Blue Sky Memoranda and all other agreements,
memoranda, correspondence and other documents printed and delivered in
connection with the offering of the Shares (including in each case any
disbursements of counsel for the Underwriters relating to such printing and
delivery), (iv) the registration or qualification of the Shares for offer and
sale under the securities or Blue Sky laws of the several states (including in
each case the fees and disbursements of counsel for the Underwriters relating to
such registration or qualification and memoranda relating thereto), (v) filings
and clearance with the National Association of Securities Dealers, Inc. in
connection with the offering, (vi) the listing of the Shares on the Nasdaq
National Market (vii) furnishing such copies of the Registration Statement, the
Prospectus and all amendments and supplements thereto as may be requested for
use in connection with the offering or sale of the Shares by the Underwriters or
by dealers to whom Shares may be sold and (viii) the performance by the Sellers
of their other obligations under this Agreement.
(l) To use its best efforts to maintain the inclusion of the Common
Stock in the Nasdaq National Market (or on a national securities exchange) for a
period of five years after the effective date of the Registration Statement.
(m) To use its best efforts to do and perform all things required or
necessary to be done and performed under this Agreement by the Company prior to
the Closing Date or any Option Closing Date, as the case may be, and to satisfy
all conditions precedent to the delivery of the Shares.
6. Representations and Warranties of the Company and the Selling
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Stockholders. The Company and the Selling Stockholders represent and warrant to
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each Underwriter that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or threatened by the Commission.
(b) (i) Each part of the Registration Statement, when such part
became effective, did not contain and each such part, as amended or
supplemented, if applicable, will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, (ii) the Registration Statement
and the Prospectus comply and, as amended or supplemented, if applicable, will
comply in all material respects with the Act and (iii) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact necessary
to
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make the statements therein, in the light of the circumstances under which they
were made, not misleading, except that the representations and warranties set
forth in this paragraph (b) do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use therein.
(c) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Act, and each Registration Statement filed
pursuant to Rule 462(b) under the Act, if any, complied when so filed in all
material respects with the Act; and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(d) The Company owns, beneficially and of record, [90]% {of the
capital stock} of Mascot Systems Private Limited, a company organized under the
laws of India ("Mascot Systems"), and [79.2]% {of the capital stock} of Xxxxx
Systems Private Limited, a company organized under the laws of India organized
under the laws of India ("Xxxxx Systems" and, together with Mascot Systems, the
"Subsidiaries"); all such shares of capital stock are owned by the Company free
and clear of any security interest, claim, lien, encumbrance or adverse interest
of any nature. The Company does not own or control, directly or indirectly, any
corporation, association or other entity other than the Subsidiaries.
(e) The Company and each of the Subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and has the corporate power and
authority to carry on its business as it is currently being conducted and to
own, lease and operate its properties, and each is duly qualified and is in good
standing as a foreign corporation authorized to do business in each jurisdiction
in which the nature of its business or its ownership or leasing of property
requires such qualification, except where the failure to be so qualified would
not have a material adverse effect on the Company and the Subsidiaries, taken as
a whole.
(f) The merger contemplated by the SWAT Merger Agreement dated
__________, 1996 (the "SWAT Merger Agreement"), between SWAT Systems
Corporation, a Pennsylvania corporation ("SWAT"), and the Company has been duly
and validly consummated and has become effective under applicable law. No
consent, approval, authorization or order of any government or governmental
agency which had jurisdiction over either of the parties to the SWAT Merger
Agreement or over their respective properties was required for the execution and
delivery of the SWAT Merger Agreement and the consummation of the transactions
contemplated thereby, except for such consents, approvals, authorizations or
orders as have been duly and timely received or obtained. The performance of
the SWAT Merger Agreement and the consummation of the transactions therein
contemplated did not result in a breach or violation of any of the terms or
provisions of, or constitute a default under, (i) any bond, debenture, note or
other evidence of indebtedness, indenture, mortgage, deed of trust or loan
agreement, or
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under any material lease, contract, joint venture or other agreement, in each
case to the best of the Company's knowledge, to which any of the parties to the
SWAT Merger Agreement was a party or by which any of such parties or their
respective properties were bound, (ii) the charter or by-laws of the Company or
SWAT, or (iii) any law or, to the best of the Company's knowledge, order of any
court which had jurisdiction over either of the parties to the SWAT Merger
Agreement or over their respective property.
(g) The purchase of [ %] of the outstanding capital stock of Mascot
Systems contemplated by the Mascot Stock Purchase Agreement dated __________,
1996 (the "Mascot Stock Purchase Agreement"), among Sunil Wadwhami, Xxxxx
Xxxxxxx and the Company has been duly and validly consummated and has become
effective under applicable law. No consent, approval, authorization or order of
any government or governmental agency which had jurisdiction over any of the
parties to the Mascot Stock Purchase Agreement or over their respective
properties was required for the execution and delivery of the Mascot Stock
Purchase Agreement and the consummation of the transactions contemplated
thereby, except for such consents, approvals, authorizations or orders as have
been duly and timely received or obtained. The performance of the Mascot Stock
Purchase Agreement and the consummation of the transactions therein contemplated
did not result in a breach or violation of any of the terms or provisions of, or
constitute a default under, (i) any bond, debenture, note or other evidence of
indebtedness, indenture, mortgage, deed of trust or loan agreement, or under any
material lease, contract, joint venture or other agreement, in each case to the
best of the Company's knowledge, to which any of the parties to the Mascot Stock
Purchase Agreement was a party or by which any of such parties or their
respective properties were bound, (ii) the charter or by-laws of either of the
parties to the Mascot Stock Purchase Agreement, or (iii) any law or, to the best
of the Company's knowledge, order of any court which had jurisdiction over any
of the parties to the Mascot Stock Purchase Agreement or over their respective
property.
(h) The purchases by the Company of the minority [interests] in
Mascot Systems and Xxxxx Systems contemplated by the Mascot Minority Stock
Purchase Agreement and the Xxxxx Minority Stock Purchase Agreement, each dated
__________, 1996 (collectively, the "Minority Stock Purchase Agreements"),
between the holders of the minority interests in each of the Subsidiaries, and
the Company will be duly and validly consummated and will become effective under
applicable law[, upon approval of the Reserve Bank of India]. No consent,
approval, authorization or order of any government or governmental agency[,
other than the Reserve Bank of India], which has jurisdiction over any of the
parties to the Minority Stock Purchase Agreements or over their respective
properties is required for the execution and delivery of the Minority Stock
Purchase Agreements and the consummation of the transactions contemplated
thereby, except for such consents, approvals, authorizations or orders as have
been duly and timely received or obtained. The performance of the Minority
Stock Purchase Agreement and the consummation of the transactions therein
contemplated will not result in a breach or violation of any of the terms or
provisions of, or constitute a default under, (i) any bond, debenture, note or
other evidence of indebtedness, indenture, mortgage, deed of trust or loan
agreement, or under any material lease, contract, joint venture or other
agreement, in
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each case to the best of the Company's knowledge, to which any of the parties to
the Minority Stock Purchase Agreements was a party or by which any of such
parties or their respective properties were bound, (ii) the charter or by-laws
of either of the parties to the Minority Stock Purchase Agreements, or (iii)
[subject to approval by the Bank of India] any law or, to the best of the
Company's knowledge, order of any court which had jurisdiction over any of the
parties to the Minority Stock Purchase Agreements or over their respective
property.
(i) All the outstanding shares of capital stock of the Company and the
Subsidiaries (including the Shares to be sold by the Selling Stockholders) have
been duly authorized and validly issued and are fully paid, non-assessable and
not subject to any preemptive or similar rights; and the Shares to be issued and
sold by the Company hereunder have been duly authorized and, when issued and
delivered to the Underwriters against payment therefor as provided by this
Agreement, will be validly issued, fully paid and non-assessable, and the
issuance of such Shares will not be subject to any preemptive or similar rights.
(j) The authorized capital stock of the Company, including the Common
Stock, conforms as to legal matters to the description thereof contained in the
Prospectus.
(k) Neither the Company nor either of the Subsidiaries is in violation
of its respective charter or by-laws or in default in the performance of any
obligation, agreement or condition contained in any bond, debenture, note or any
other evidence of indebtedness or in any other agreement, indenture or
instrument material to the conduct of the business of the Company and the
Subsidiaries, taken as a whole, to which the Company or either of the
Subsidiaries is a party or by which it or either of the Subsidiaries or their
respective property is bound.
(l) The execution, delivery and performance of this Agreement, the [S
Corporation Termination Agreement, the Tax Allocation and Indemnification
Agreement] collectively, the "Ancillary Agreements"), compliance by the Company
with all the provisions hereof and thereof and the consummation of the
transactions contemplated hereby and by the Ancillary Agreements will not
require any consent, approval, authorization or other order of any court,
regulatory body, administrative agency or other governmental body, except as
such may be required under the securities or Blue Sky laws of the various
states, and will not conflict with or constitute a breach of any of the terms or
provisions of, or a default under, the charter or by-laws of the Company or any
of its subsidiaries or any agreement, indenture or other instrument to which it
or any of its subsidiaries is a party or by which it or any of the Subsidiaries
or their respective property is bound, or violate or conflict with any laws,
administrative regulations or rulings or court decrees applicable to the Company
or the Subsidiaries, or their respective property.
(m) Except as otherwise set forth in the Prospectus, there are no
material legal or governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any of their respective property is
the subject, and, to
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the best of the Company's knowledge, no such proceedings are threatened or
contemplated. No contract or document of a character required to be described in
the Registration Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement is not so described or filed as required.
(n) Neither the Company nor either of the Subsidiaries has violated
any foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental Laws"), nor any
foreign, federal or state law relating to discrimination in the hiring,
promotion or pay of employees nor any applicable federal or state wages and
hours laws, nor any provisions of the Employee Retirement Income Security Act or
the rules and regulations promulgated thereunder, which in each case might
result in any material adverse change in the business, prospects, financial
condition or results of operation of the Company and the Subsidiaries, taken as
a whole.
(o) The Company and each of the Subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("permits"), including, without limitation, under any applicable
Environmental Laws, as are necessary to own, lease and operate its respective
properties and to conduct its business; the Company and each of its subsidiaries
has fulfilled and performed all of its material obligations with respect to such
permits and no event has occurred which allows, or after notice or lapse of time
would allow, revocation or termination thereof or results in any other material
impairment of the rights of the holder of any such permit; and, except as
described in the Prospectus, such permits contain no restrictions that are
materially burdensome to the Company or any of its subsidiaries.
(p) In the ordinary course of its business, the Company conducts a
periodic review of the effect of Environmental Laws on the business, operations
and properties of the Company and its subsidiaries, in the course of which it
identifies and evaluates associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for clean-up, closure
of properties or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties). On the basis of such review, the Company has
reasonably concluded that such associated costs and liabilities would not,
singly or in the aggregate, have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
(q) Except as otherwise set forth in the Prospectus or such as are not
material to the business, prospects, financial condition or results of operation
of the Company and its subsidiaries, taken as a whole, the Company and each of
the Subsidiaries has good and marketable title, free and clear of all liens,
claims, encumbrances and restrictions except liens for taxes not yet due and
payable, to all property and assets described in the Registration Statement as
being owned by it. All leases to which the Company or either of the
Subsidiaries is a party are valid and binding and no default has occurred or is
continuing thereunder, which might result in any material adverse change in the
business, prospects, financial condition or results of operation of the Company
and its
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subsidiaries taken as a whole, and the Company and the Subsidiaries enjoy
peaceful and undisturbed possession under all such leases to which any of them
is a party as lessee with such exceptions as do not materially interfere with
the use made by the Company or such Subsidiary.
(r) The Company and each of the Subsidiaries maintain reasonably
adequate insurance.
(s) Xxxxxx Xxxxxxxx LLP are independent public accountants with
respect to the Company as required by the Act.
(t) The financial statements, together with related schedules and
notes forming part of the Registration Statement and the Prospectus (and any
amendment or supplement thereto), present fairly the consolidated financial
position, results of operations and changes in financial position of the Company
and the Subsidiaries on the basis stated in the Registration Statement at the
respective dates or for the respective periods to which they apply; such
statements and related schedules and notes have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved, except as disclosed therein; and the other financial and
statistical information and data set forth in the Registration Statement and the
Prospectus (and any amendment or supplement thereto) is, in all material
respects, accurately presented and prepared on a basis consistent with such
financial statements and the books and records of the Company.
(u) The Company and each of the Subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("permits") as are necessary to own, lease and operate its
respective properties and to conduct its business in the manner described in the
Prospectus, subject to such qualifications as may be set forth in the
Prospectus; the Company and each of the Subsidiaries has fulfilled and performed
all of its material obligations with respect to such permits and no event has
occurred which allows, or after notice or lapse of time would allow, revocation
or termination thereof or results in any other material impairment of the rights
of the holder of any such permit, subject in each case to such qualification as
may be set forth in the Prospectus; and, except as described in the Prospectus,
such permits contain no restrictions that are materially burdensome to the
Company or any of its subsidiaries.
(v) Except as disclosed in or specifically contemplated by the
Prospectus, the Company and the Subsidiaries have sufficient intellectual
property rights (including, without limitation, trademarks, trade names, patent
rights, mask works, copyrights and licenses), approvals and governmental
authorizations to conduct their businesses as now conducted; the expiration of
any intellectual property rights (including, without limitation, trademarks,
trade names, patent rights, mask works, copyrights and licenses), approvals or
governmental authorizations would not have a material adverse effect on the
condition (financial or otherwise), business, results of operations or prospects
of the Company or the Subsidiaries; and the Company has no knowledge of any
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infringement by it or the Subsidiaries of intellectual property rights
(including, without limitation, trademarks, trade names, patent rights, mask
works, copyrights and licenses), trade secret or other similar rights of others,
and there is no claim being made against the Company or the Subsidiaries
regarding trademark, trade name, patent, mask work, copyright, license, trade
secret or other infringement of intellectual property rights which could have a
material adverse effect on the condition (financial or otherwise), business,
results of operations or prospects of the Company or on the operations or
prospects of Subsidiaries.
(w) The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
(x) No holder of any security of the Company has any right to require
registration of shares of Common Stock or any other security of the Company.
(y) [The Company has complied with all provisions of Section 517.075,
Florida Statutes (Chapter 92-198, Laws of Florida).]
(z) The Company has filed a registration statement pursuant to Section
12(g) of the Exchange Act, to register the Common Stock, has filed an
application to list the Shares on the Nasdaq National Market, and has received
notification that the listing has been approved, subject to notice of issuance.
(aa) Except as disclosed in the Prospectus, there are no business
relationships or related party transactions required to be disclosed therein by
Item 404 of Regulation S-K of the Commission.
(bb) There is (i) no significant unfair labor practice complaint
pending against the Company or any of its subsidiaries or, to the best knowledge
of the Company, threatened against any of them, before the National Labor
Relations Board or any state or local labor relations board, and no significant
grievance or more significant arbitration proceeding arising out of or under any
collective bargaining agreement is so pending against the Company or any of its
subsidiaries or, to the best knowledge of the Company, threatened against any of
them, and (ii) no significant strike, labor dispute, slowdown or stoppage
pending against the Company or any of its subsidiaries or, to the best knowledge
of the Company, threatened against it or any of its subsidiaries except for such
actions specified in clause (i) or (ii) above, which, singly or in the aggregate
could not reasonably be expected to have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
(cc) All material tax returns required to be filed by the Company and
each of its subsidiaries in any jurisdiction have been filed, other than those
filings being contested in good faith, and all material taxes, including
withholding taxes, penalties and interest, assessments, fees and other charges
due pursuant to such returns or pursuant to any assessment received by the
Company or any of its subsidiaries have been paid, other
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than those being contested in good faith and for which adequate reserves have
been provided.
7. Representations and Warranties of the Selling Stockholders. Each
----------------------------------------------------------
Selling Stockholder severally represents and warrants to each Underwriter that:
(a) Such Selling Stockholder is the lawful owner of the Shares to be
sold by such Selling Stockholder pursuant to this Agreement and has, and on the
Closing Date (and Option Closing Date, if applicable) will have, good and clear
title to such Shares, free of all restrictions on transfer, liens, encumbrances,
security interests and claims whatsoever.
(b) Upon delivery of and payment for such Shares pursuant to this
Agreement, good and clear title to such Shares will pass to the Underwriters,
free of all restrictions on transfer, liens, encumbrances, security interests
and claims whatsoever.
(c) Such Selling Stockholder has, and on the Closing Date will have,
full legal right, power and authority to enter into this Agreement and the
Custody Agreement between the Selling Stockholders and
__________________________________, as Custodian (the "Custody Agreement") and
to sell, assign, transfer and deliver such Shares in the manner provided herein
and therein, and this Agreement and the Custody Agreement have been duly
authorized, executed and delivered by such Selling Stockholder and each of this
Agreement and the Custody Agreement is a valid and binding agreement of such
Selling Stockholder enforceable in accordance with its terms, except as rights
to indemnity and contribution hereunder may be limited by applicable law.
(d) The power of attorney signed by such Selling Stockholder
appointing _________________ and ________________, or either one of them, as his
attorney-in-fact to the extent set forth therein with regard to the transactions
contemplated hereby and by the Registration Statement and the Custody Agreement
has been duly authorized, executed and delivered by or on behalf of such Selling
Stockholder and is a valid and binding instrument of such Selling Stockholder
enforceable in accordance with its terms, and, pursuant to such power of
attorney, such Selling Stockholder has authorized _________________ and
________________, or either one of them, to execute and deliver on his behalf
this Agreement and any other document necessary or desirable in connection with
transactions contemplated hereby and to deliver the Shares to be sold by such
Selling Stockholder pursuant to this Agreement.
(e) Such Selling Stockholder has not taken, and will not take,
directly or indirectly, any action designed to, or which might reasonably be
expected to, cause or result in stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the Shares
pursuant to the distribution contemplated by this Agreement, and other than as
permitted by the Act, the Selling Stockholder has not distributed and will not
distribute any prospectus or other offering material in connection with the
offering and sale of the Shares.
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(f) The execution, delivery and performance of this Agreement by such
Selling Stockholder, compliance by such Selling Stockholder with all the
provisions hereof and the consummation of the transactions contemplated hereby
will not require any consent, approval, authorization or other order of any
court, regulatory body, administrative agency or other governmental body (except
as such may be required under the Act, state securities laws or Blue Sky laws)
and will not conflict with or constitute a breach of any of the terms or
provisions of, or a default under, organizational documents of such Selling
Stockholder, if not an individual, or any agreement, indenture or other
instrument to which such Selling Stockholder is a party or by which such Selling
Stockholder or property of such Selling Stockholder is bound, or violate or
conflict with any laws, administrative regulation or ruling or court decree
applicable to such Selling Stockholder or property of such Selling Stockholder.
(g) Such parts of the Registration Statement under the caption
"Principal and Selling Stockholders" which specifically relate to such Selling
Stockholder do not, and will not on the Closing Date (and any Option Closing
Date, if applicable), contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of circumstances under which they were made, not
misleading.
(h) At any time during the period described in paragraph 5(e) hereof,
if there is any change in the information referred to in paragraph 7(g) above,
the Selling Stockholders will immediately notify you of such change.
8. Indemnification. (a) The Company and each Selling Stockholder,
---------------
jointly and severally, agree to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of Section
15 of the Act or Section 20 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), from and against any and all losses, claims, damages,
liabilities and judgments caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or the
Prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) or any preliminary prospectus, or caused by
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or judgments are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to any Underwriters furnished in
writing to the Company by or on behalf of any Underwriter through you expressly
for use therein. Notwithstanding the foregoing, the aggregate liability of any
Selling Stockholder pursuant to the provisions of this paragraph shall be
limited to an amount equal to the aggregate purchase price received by such
Selling Stockholder from the sale of such Selling Stockholder's Shares
hereunder; provided, however, that the foregoing indemnity agreement with
------------------
respect to any preliminary prospectus shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages and
liabilities and judgments purchased Shares, or any person controlling such
Underwriter, if a copy of the Prospectus (as then
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amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Underwriter
to such person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the Shares to such person, and if the
Prospectus (as so amended and supplemented) would have cured the defect giving
rise to such loss, claim, damage, liability or judgment.
(b) In case any action shall be brought against any Underwriter or any
person controlling such Underwriter, based upon any preliminary prospectus, the
Registration Statement or the Prospectus or any amendment or supplement thereto
and with respect to which indemnity may be sought against the Company and the
Selling Stockholders, such Underwriter shall promptly notify the Company and the
Selling Stockholders in writing and the Company and the Selling Stockholders
shall assume the defense thereof, including the employment of counsel reasonably
satisfactory to such indemnified party and payment of all fees and expenses.
Any Underwriter or any such controlling person shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such
Underwriter or such controlling person unless (i) the employment of such counsel
has been specifically authorized in writing by the Company, (ii) the Company and
the Selling Stockholders shall have failed to assume the defense and employ
counsel or (iii) the named parties to any such action (including any impleaded
parties) include both such Underwriter or such controlling person and the
Company or any Selling Stockholder, as the case may be, and such Underwriter or
such controlling person shall have been advised by such counsel that there may
be one or more legal defenses available to it which are different from or
additional to those available to the Company or the Selling Stockholders, as the
case may be, (in which case the Company and the Selling Stockholders shall not
have the right to assume the defense of such action on behalf of such
Underwriter or such controlling person, it being understood, however, that the
Company and the Selling Stockholders shall not, in connection with any one such
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for all such Underwriters and controlling
persons, which firm shall be designated in writing by Xxxxxxxxx, Xxxxxx &
Xxxxxxxx Securities Corporation and that all such fees and expenses shall be
reimbursed as they are incurred). A Seller shall not be liable for any
settlement of any such action effected without the written consent of such
Seller but if settled with the written consent of such Seller, such Seller
agrees to indemnify and hold harmless any Underwriter and any such controlling
person from and against any loss or liability by reason of such settlement.
Notwithstanding the immediately preceding sentence, if in any case where the
fees and expenses of counsel are at the expense of the indemnifying party and an
indemnified party shall have requested the indemnifying party to reimburse the
indemnified party for such fees and expenses of counsel as incurred, such
indemnifying party agrees that it shall be liable for any settlement of any
action effected without its written consent if (i) such settlement is entered
into more than ten business days after the receipt by such indemnifying party of
the aforesaid request and (ii) such indemnifying party shall have failed to
reimburse the indemnified party in accordance with such request
-15-
for reimbursement prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement, any person controlling the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, each Selling
Stockholder and each person, if any, controlling such Selling Stockholder within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act to the
same extent as the foregoing indemnity from the Sellers to each Underwriter but
only with reference to information relating to such Underwriter furnished in
writing by or on behalf of such Underwriter through you expressly for use in the
Registration Statement, the Prospectus or any preliminary prospectus. In case
any action shall be brought against the Company, any of its directors, any such
officer or any person controlling the Company or any Selling Stockholder or any
person controlling such Selling Stockholder based on the Registration Statement,
the Prospectus or any preliminary prospectus and in respect of which indemnity
may be sought against any Underwriter, the Underwriter shall have the rights and
duties given to the Sellers (except that if any Seller shall have assumed the
defense thereof) such Underwriter shall not be required to do so, but may employ
separate counsel therein and participate in the defense thereof but the fees and
expenses of such counsel shall be at the expense of such Underwriter), and the
Company, its directors, any such officers and any person controlling the Company
and the Selling Stockholders and any person controlling such Selling
Stockholders shall have the rights and duties given to the Underwriter, by
Section 8(b) hereof.
(d) If the indemnification provided for in this Section 8 is
unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities or judgments referred to therein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, liabilities and judgments (i) in such proportion as is appropriate to
reflect the relative benefits received by the Sellers on the one hand and the
Underwriters on the other hand from the offering of the Shares or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Sellers and
the Underwriters in connection with the statements or omissions which resulted
in such losses, claims, damages, liabilities or judgments, as well as any other
relevant equitable considerations. The relative benefits received by the
Sellers and the Underwriters shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) received by the
Sellers, and the total underwriting discounts and commissions received by the
Underwriters, bear to the total price to the public of the Shares, in each case
as set forth in the table on the cover page of the Prospectus. The relative
fault of the Sellers and the Underwriters shall be
-16-
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the Company, the Selling Stockholders or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Sellers and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 8(d) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 8(d) are several in proportion to the respective number of Shares
purchased by each of the Underwriters hereunder and not joint.
(e) Each Seller hereby designates Mastech Corporation, 0000 XxXxx
Xxxx, Xxxxxxx, Xxxxxxxxxxxx 00000, a Pennsylvania corporation, as its authorized
agent, upon which process may be served in any action, suit or proceeding which
may be instituted in any state or federal court in the State of New York by any
Underwriter or person controlling an Underwriter asserting a claim for
indemnification or contribution under or pursuant to this Section 8, and each
Seller will accept the jurisdiction of such court in such action, and waives, to
the fullest extent permitted by applicable law, any defense based upon lack of
personal jurisdiction or venue. A copy of any such process shall be sent or
given to such Seller, at the address for notices specified in Section 13 hereof.
9. Conditions of Underwriters' Obligations. The several obligations of
---------------------------------------
the Underwriters to purchase the Firm Shares under this Agreement are subject to
the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company contained in
this Agreement shall be true and correct on the Closing Date with the same force
and effect as if made on and as of the Closing Date.
-17-
(b) The Registration Statement shall have become effective not later
than 5:00 P.M. (and in the case of a Registration Statement filed under Rule
462(b) of the Act, not later than 10:00 p.m.), New York City time, on the date
of this Agreement or at such later date and time as you may approve in writing,
and at the Closing Date no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been commenced or shall be pending before or contemplated by
the Commission.
(c) (i) Since the date of the latest balance sheet included in the
Registration Statement and the Prospectus, there shall not have been any
material adverse change, or any development involving a prospective material
adverse change, in the condition, financial or otherwise, or in the earnings,
affairs or business prospects, whether or not arising in the ordinary course of
business, of the Company, (ii) since the date of the latest balance sheet
included in the Registration Statement and the Prospectus there shall not have
been any change, or any development involving a prospective material adverse
change, in the capital stock or in the long-term debt of the Company from that
set forth in the Registration Statement and Prospectus, (iii) the Company and
its subsidiaries shall have no liability or obligation, direct or contingent,
which is material to the Company and its subsidiaries, taken as a whole, other
than those reflected in the Registration Statement and the Prospectus and (iv)
on the Closing Date you shall have received a certificate dated the Closing
Date, signed by _______________ and _______________, in their capacities as the
_______________ and _________________ of the Company, confirming the matters set
forth in paragraphs (a), (b), and (c) of this Section 9.
(d) All the representations and warranties of the Selling Stockholders
contained in this Agreement shall be true and correct on the Closing Date with
the same force and effect as if made on and as of the Closing Date and you shall
have received a certificate to such effect, dated the Closing Date, from each
Selling Stockholder.
(e) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing Date,
of Xxxxxxxx Xxxxxxxxx Professional Corporation, counsel for the Company and the
Selling Stockholders, to the effect that:
(i) the Company [and each of the Subsidiaries] has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and has the corporate power and
authority required to carry on its business as it is currently being conducted
and to own, lease and operate its properties;
(ii) the Company [and each of the Subsidiaries] is duly qualified and
is in good standing as a foreign corporation authorized to do business in each
jurisdiction in which the nature of its business or its ownership or leasing of
property requires such qualification, except where the failure to be so
qualified would not have a material adverse effect on the Company and the
Subsidiaries, taken as a whole;
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(iii) all of the outstanding shares of capital stock of, or other
ownership interests in, each of the Subsidiaries have been duly and validly
authorized and issued and are fully paid and non-assessable, and are owned by
the Company, free and clear of any security interest, claim, lien, encumbrance
or adverse interest of any nature;
(iv) all the outstanding shares of Common Stock (including the Shares
to be sold by the Selling Stockholders) have been duly authorized and validly
issued and are fully paid, non-assessable and not subject to any preemptive or
similar rights;
(v) the Shares to be issued and sold by the Company hereunder have
been duly authorized, and when issued and delivered to the Underwriters against
payment therefor as provided by this Agreement, will have been validly issued
and will be fully paid and non-assessable, and the issuance of such Shares is
not subject to any preemptive or similar rights;
(vi) this Agreement has been duly authorized, executed and delivered
by the Company and each of the Selling Stockholders and is a valid and binding
agreement of the Company and each Selling Stockholder enforceable in accordance
with its terms (except as rights to indemnity and contribution hereunder may be
limited by applicable law);
(vii) the authorized capital stock of the Company, including the
Common Stock, conforms as to legal matters to the description thereof contained
in the Prospectus;
(viii) the Registration Statement has become effective under the Act,
no stop order suspending its effectiveness has been issued and no proceedings
for that purpose are, to the knowledge of such counsel, pending before or
contemplated by the Commission;
(ix) the statements under the captions "_______________",
"_______________", "_______________", "_______________", "_______________",
"_______________", "Description of Capital Stock" and "Underwriting" in the
Prospectus and Items 14 and 15 of Part II of the Registration Statement insofar
as such statements constitute a summary of legal matters documents or
proceedings referred to therein, fairly present the information called for with
respect to such legal matters, documents and proceedings;
(x) neither the Company nor either of the Subsidiaries is in violation
of its respective charter or by-laws and, to the best of such counsel's
knowledge after due inquiry, neither the Company nor either of the Subsidiaries
is in default in the performance of any obligation, agreement or condition
contained in any bond, debenture, note or any other evidence of indebtedness or
in any other agreement, indenture or instrument material to the conduct of the
business of the Company and its subsidiaries, taken as a whole, to which the
Company or either of the Subsidiaries is a party or by which it or either of the
Subsidiaries or their respective property is bound;
-19-
(xi) the execution, delivery and performance of this Agreement by the
Company and each Selling Stockholder, compliance by the Company and each Selling
Stockholder with all the provisions hereof and the consummation of the
transactions contemplated hereby will not require any consent, approval,
authorization or other order of any court, regulatory body, administrative
agency or other governmental body (except as such may be required under the Act
or other securities or Blue Sky laws) and will not conflict with or constitute a
breach of any of the terms or provisions of, or a default under, the charter or
by-laws of the Company or any of its subsidiaries or the organizational
documents of any Selling Stockholder that is not an individual or any agreement,
indenture or other instrument to which the Company or any of its subsidiaries or
any Selling Stockholder is a party or by which the Company or any of its
subsidiaries or any Selling Stockholder or their respective properties are
bound, or violate or conflict with any laws, administrative regulations or
rulings or court decrees applicable to the Company or any of its subsidiaries or
any Selling Stockholder or their respective properties;
(xii) after due inquiry, such counsel does not know of any legal or
governmental proceeding pending or threatened to which the Company or any of its
subsidiaries is a party or to which any of their respective property is subject
which is required to be described in the Registration Statement or the
Prospectus and is not so described, or of any contract or other document which
is required to be described in the Registration Statement or the Prospectus or
is required to be filed as an exhibit to the Registration Statement which is not
described or filed as required;
(xiii) to the best of such counsel's knowledge, after due inquiry,
neither the Company nor any of its subsidiaries has violated any Environmental
Laws, nor any federal or state law relating to discrimination in the hiring,
promotion or pay of employees nor any applicable federal or state wages and
hours laws, nor any provisions of the Employee Retirement Income Security Act or
the rules and regulations promulgated thereunder, which in each case might
result in any material adverse change in the business, prospects, financial
condition or results of operation of the Company and its subsidiaries, taken as
a whole;
(xiv) the Company and each of the Subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("permits"), including, without limitation, under any applicable
Environmental Laws, as are necessary to own, lease and operate its respective
properties and to conduct its business in the manner described in the
Prospectus; to the best of such counsel's knowledge, after due inquiry, the
Company and each of its subsidiaries has fulfilled and performed all of its
material obligations with respect to such permits and no event has occurred
which allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other material impairment of the rights of
the holder of any such permit, subject in each case to such qualification as may
be set forth in the Prospectus; and, except as described in the Prospectus, such
permits contain no restrictions that are materially burdensome to the Company or
either of the Subsidiaries;
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(xv) the Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended;
(xvi) to the best of such counsel's knowledge, after due inquiry, no
holder of any security of the Company has any right to require registration of
shares of Common Stock or any other security of the Company;
(xvii) to the best of such counsel's knowledge, after due inquiry,
except as otherwise set forth in the Registration Statement or such as are not
material to the business, prospects, financial condition or results of operation
of the Company and its subsidiaries, taken as a whole, the Company and each of
the Subsidiaries has good and marketable title, free and clear of all liens,
claims, encumbrances and restrictions except liens for taxes not yet due and
payable, to all property and assets described in the Registration Statement as
being owned by it;
(xviii) to the best of such counsel's knowledge, after due inquiry,
all leases to which the Company or any of its subsidiaries is a party are valid
and binding and no default has occurred or is continuing thereunder, which might
result in any material adverse change in the business, prospects, financial
condition or results of operation of the Company and the Subsidiaries taken as a
whole, and the Company and the Subsidiaries enjoy peaceful and undisturbed
possession under all such leases to which any of them is a party as lessee with
such exceptions as do not materially interfere with the use made by the Company
or such subsidiary;
(xix) (1) the Registration Statement (including any Registration
Statement filed under 462(b) of the Act, if any) and the Prospectus and any
supplement or amendment thereto (except for financial statements as to which no
opinion need be expressed) comply as to form in all material respects with the
Act, and (2) such counsel believes that (except for financial statements, as
aforesaid) the Registration Statement and the prospectus included therein at the
time the Registration Statement became effective did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
that the Prospectus, as amended or supplemented, if applicable (except for
financial statements, as aforesaid) does not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading;
(xx) the Custody Agreement has been duly authorized, executed and
delivered by each Selling Stockholder and is a valid and binding agreement of
such Selling Stockholder enforceable in accordance with its terms;
(xxi) each Selling Stockholder has full legal right, power and
authority, and any approval required by law (other than any approval imposed by
the applicable state securities and Blue Sky laws) to sell, assign, transfer and
deliver the Shares to be sold by him in the manner provided in this Agreement
and the Custody Agreement;
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(xxii) each Selling Stockholder has good and clear title to the
certificates for the Shares to be sold by him and upon delivery thereof,
pursuant hereto and payment therefor, good and clear title will pass to the
Underwriters, severally, free of all restrictions on transfer, liens,
encumbrances, security interests and claims whatsoever; and
(xxiii) the power of attorney signed by each Selling Stockholder
appointing _________________ and ___________, or either of them, as his
attorney-in-fact to the extent set forth therein with regard to the transactions
contemplated hereby and by the Registration Statement has been duly authorized,
executed and delivered by or on behalf of each Selling Stockholder and are valid
and binding instruments of such Selling Stockholder enforceable in accordance
with its terms, and pursuant to such power of attorney, each of the Selling
Stockholders has authorized _________________ and ________________, or either of
them, to execute and deliver on their behalf this Agreement and any other
document necessary or desirable in connection with transactions contemplated
hereby and to deliver the Shares to be sold by them pursuant to this Agreement
In giving such opinion with respect to the matters covered by clause (xvii)
such counsel may state that their opinion and belief are based upon their
participation in the preparation of the Registration Statement and Prospectus
and any amendments or supplements thereto and review and discussion of the
contents thereof, but are without independent check or verification except as
specified.
The opinion of Xxxxxxxx Xxxxxxxxx Professional Corporation described in
paragraph (e) above shall be rendered to you at the request of the Company or
one or more of the Selling Stockholders, as the case may be, and shall so state
therein.
(f) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing Date,
of ____________________, counsel for the Subsidiaries to the effect that:
(i) Each of the Subsidiaries has been duly organized and is validly
existing as a {__________} in good standing under the laws of [India];
(ii) Mascot Systems has _____ {shares} of {type of} stock authorized,
_______ of which are issued and outstanding; all necessary and proper corporate
proceedings have been taken in order to authorize validly such authorized stock;
all outstanding shares of {type of} stock have been duly and validly issued, are
fully paid and non-assessable, have been issued in compliance with Indian law,
were not issued in violation of or subject to any preemptive rights or other
rights to subscribe for or purchase any securities;
(iii) Xxxxx Systems has _____ {shares} of {type of} stock authorized,
_______ of which are issued and outstanding; all necessary and proper
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corporate proceedings have been taken in order to authorize validly such
authorized stock; all outstanding shares of {type of} stock have been duly and
validly issued, are fully paid and non-assessable, have been issued in
compliance with Indian law, were not issued in violation of or subject to any
preemptive rights or other rights to subscribe for or purchase any securities;
(iv) The [Selling Stockholders] own beneficially and of record _______
shares of {type of} stock of Mascot Systems and SWAT owns beneficially and of
record _______ shares of {type of} stock of Xxxxx Systems, in each case free and
clear of of any security interest, claim, lien, encumbrance or adverse interest
of any nature;
(v) The {describe transactions contemporaneous with offering or other
material transaction} and the consummation of the transactions contemplated
hereby and by the Ancillary Agreements will not result in a breach of, or
constitute a default under, any indenture, mortgage, deed of trust, trust
{constructive or other}, loan agreement, lease, franchise, license or other
agreement or instrument to which any of the Subsidiaries is a party or by which
any of its properties may be bound, or violate any statute, judgment, decree,
order, rule or regulation known to such counsel of any court or governmental
body having jurisdiction over the Subsidiaries or any of their properties and to
the best of such counsel's knowledge, no approval, authorization, order or
consent of any court, regulatory body, administrative agency or other
governmental body is required for {describe transactions contemporaneous with
offering or other material transaction} the execution and delivery of this
Agreement, the Ancillary Agreements or the Shareholders Agreement or the
consummation by the Selling Shareholders of the transactions contemplated herein
and therein, except as have been made or obtained;
(vi) The statements set forth in the Prospectus under the headings
"__________," "__________" and "__________," insofar as such statements
constitute a summary of the terms of legal matters, documents, agreements or
other instruments or governmental, regulatory or other legal proceedings, are
fair and accurate in all material respects.
In rendering such opinion, such counsel may rely as to matters of fact, on
certificates of the officers of the Subsidiaries and of governmental officials,
in which case their opinion is to state that they are so doing and that the
Underwriters are justified in relying on such opinions or certificates and
copies of said opinions or certificates are to be attached to the opin
(g) [Opinion of Immigration counsel.]
(h) You shall have received on the Closing Date an opinion, dated the
Closing Date, of Xxxxxxxx & Xxxxxx, Ltd., counsel for the Underwriters, as to
the matters referred to in clauses (v), (vi) (but only with respect to the
Company), (viii), (ix) (but only with respect to the statements under the
captions "Description of Capital Stock" and "Underwriting") and (xvii) of the
foregoing paragraph (e). In giving such opinion with respect to the matters
covered by clause (xvii) such counsel may state that their opinion
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and belief are based upon their participation in the preparation of the
Registration Statement and Prospectus and any amendments or supplements thereto
and review and discussion of the contents thereof, but are without independent
check or verification except as specified.
(i) You shall have received a letter on and as of the Closing Date, in
form and substance satisfactory to you, from Xxxxxx Xxxxxxxx LLP, independent
public accountants, with respect to the financial statements and certain
financial information contained in the Registration Statement and the Prospectus
and substantially in the form and substance of the letter delivered to you by
Xxxxxx Xxxxxxxx LLP on the date of this Agreement.
(j) The Company and the Selling Stockholders shall not have failed at
or prior to the Closing Date to perform or comply with any of the agreements
herein contained and required to be performed or complied with by the Company at
or prior to the Closing Date.
(k) You shall have received on the Closing Date, a certificate of each
Selling Stockholder who is not a U.S. Person to the effect that such Selling
Stockholder is not a U.S. Person (as defined under applicable U.S. federal tax
legislation), which certificate may be in the form of a properly completed and
executed United States Treasury Department Form W-8 (or other applicable form or
statement specified by Treasury Department regulations in lieu thereof).
(l) You shall have received on the Closing Date a properly completed
and executed United States Treasury Department Form W-9 from each selling
stockholder.
The several obligations of the Underwriters to purchase any Additional
Shares hereunder are subject to the delivery to you on the applicable Option
Closing Date of such documents as you may reasonably request with respect to the
good standing of the Company, the due authorization and issuance of such
Additional Shares and other matters related to the issuance of such Additional
Shares.
10. Effective Date of Agreement and Termination. This Agreement shall
-------------------------------------------
become effective upon the later of (i) execution of this Agreement and (ii) when
notification of the effectiveness of the Registration Statement has been
released by the Commission.
This Agreement may be terminated at any time prior to the Closing Date by
you by written notice to the Sellers if any of the following has occurred: (i)
since the respective dates as of which information is given in the Registration
Statement and the Prospectus, any material adverse change or development
involving a prospective material adverse change in the condition, financial or
otherwise, of the Company and subsidiaries, taken as a whole, or the earnings,
affairs, or business prospects of the Company and its subsidiaries, taken as a
whole, whether or not arising in the ordinary course of business,
-24-
which would, in your judgment, make it impracticable to market the Shares on the
terms and in the manner contemplated in the Prospectus, (ii) any outbreak or
escalation of hostilities or other national or international calamity or crisis
or change in economic conditions or in the financial markets of the United
States or elsewhere that, in your judgment, is material and adverse and would,
in your judgment, make it impracticable to market the Shares on the terms and in
the manner contemplated in the Prospectus, (iii) the suspension or material
limitation of trading in securities on the New York Stock Exchange, the American
Stock Exchange or the Nasdaq National Market System or limitation on prices for
securities on any such exchange or National Market System, (iv) the enactment,
publication, decree or other promulgation of any federal or state statute,
regulation, rule or order of any court or other governmental authority which in
your opinion materially and adversely affects, or will materially and adversely
affect, the business or operations of the Company or any Subsidiary, (v) the
declaration of a banking moratorium by either federal or New York State
authorities or (vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in your
opinion has a material adverse effect on the financial markets in the United
States.
If on the Closing Date or on an Option Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase the Firm
Shares or Additional Shares, as the case may be, which it or they have agreed to
purchase hereunder on such date and the aggregate number of Firm Shares or
Additional Shares, as the case may be, which such defaulting Underwriter or
Underwriters, as the case may be, agreed but failed or refused to purchase is
not more than one-tenth of the total number of Shares to be purchased on such
date by all Underwriters, each non-defaulting Underwriter shall be obligated
severally, in the proportion which the number of Firm Shares set forth opposite
its name in Schedule I bears to the total number of Firm Shares which all the
non-defaulting Underwriters, as the case may be, have agreed to purchase, or in
such other proportion as you may specify, to purchase the Firm Shares or
Additional Shares, as the case may be, which such defaulting Underwriter or
Underwriters, as the case may be, agreed but failed or refused to purchase on
such date; provided that in no event shall the number of Firm Shares or
--------
Additional Shares, as the case may be, which any Underwriter has agreed to
purchase pursuant to Section 2 hereof be increased pursuant to this Section 10
by an amount in excess of one-ninth of such number of Firm Shares or Additional
Shares, as the case may be, without the written consent of such Underwriter. If
on the Closing Date or on an Option Closing Date, as the case may be, any
Underwriter or Underwriters shall fail or refuse to purchase Firm Shares, or
Additional Shares, as the case may be, and the aggregate number of Firm Shares
or Additional Shares, as the case may be, with respect to which such default
occurs is more than one-tenth of the aggregate number of Shares to be purchased
on such date by all Underwriters and arrangements satisfactory to you and the
applicable Sellers for purchase of such Shares are not made within 48 hours
after such default, this Agreement will terminate without liability on the part
of any non-defaulting Underwriter and the applicable Sellers. In any such case
which does not result in termination of this Agreement, either you or the
Sellers shall have the right to postpone the Closing Date or the applicable
Option Closing Date, as the case may be, but in no event for longer than seven
days, in order that the required changes, if any, in
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the Registration Statement and the Prospectus or any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
any such Underwriter under this Agreement.
11. Agreements of the Selling Stockholders. Each Selling Stockholder
--------------------------------------
severally agrees with you and the Company:
(a) To pay or to cause to be paid all transfer taxes with respect to
the Shares to be sold by such Selling Stockholder; and
(b) To take all reasonable actions in cooperation with the Company and
the Underwriters to cause the Registration Statement to become effective at the
earliest possible time, to do and perform all things to be done and performed
under this Agreement prior to the Closing Date and to satisfy all conditions
precedent to the delivery of the Shares pursuant to this Agreement.
12. Miscellaneous. Notices given pursuant to any provision of this
-------------
Agreement shall be addressed as follows: (a) if to the Company, to Mastech
Corporation, 0000 XxXxx Xxxx, Xxxxxxx, XX 00000, (b) if to the Selling
Stockholders, to [NAME OF ATTORNEY-IN-FACT] c/o [ADDRESS OF ATTORNEY-IN-FACT]
and (c) if to any Underwriter or to you, to you c/x Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation, 000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Syndicate Department, or in any case to such other address as the person to be
notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Selling Stockholders, the Company, its
officers and directors and of the several Underwriters set forth in or made
pursuant to this Agreement shall remain operative and in full force and effect,
and will survive delivery of and payment for the Shares, regardless of (i) any
investigation, or statement as to the results thereof, made by or on behalf of
any Underwriter or by or on behalf of the Sellers, the officers or directors of
the Company or any controlling person of the Sellers, (ii) acceptance of the
Shares and payment for them hereunder and (iii) termination of this Agreement.
If this Agreement shall be terminated by the Underwriters because of
any failure or refusal on the part of the Sellers to comply with the terms or to
fulfill any of the conditions of this Agreement, the Sellers agree to reimburse
the several Underwriters for all out-of-pocket expenses (including the fees and
disbursements of counsel) reasonably incurred by them.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Sellers, the
Underwriters, any controlling persons referred to herein and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include
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a purchaser of any of the Shares from any of the several Underwriters merely
because of such purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
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Please confirm that the foregoing correctly sets forth the agreement
between the Company, the Selling Stockholders and the several Underwriters.
Very truly yours,
Mastech Corporation
By:_______________________________________
Title:
THE SELLING STOCKHOLDERS NAMED
IN SCHEDULE II HERETO
By:____________________________
Attorney-in-fact
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
XXXXX & COMPANY
XXXXXXXXXX SECURITIES
XXXXXX/HUNTER INCORPORATED
Acting severally on behalf of
themselves and the several
Underwriters named in
Schedule I hereto
By: XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
By:__________________________
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SCHEDULE I
----------
Underwriters Number of Firm Shares
------------------------------ to be Purchased
---------------------
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
XXXXX & COMPANY
XXXXXXXXXX SECURITIES
XXXXXX/HUNTER INCORPORATED
____________________
Total
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SCHEDULE II
-----------
Selling Stockholders
--------------------
Number of Firm
Name Shares Being Sold
---------------- -----------------
Xxxxx Xxxxxxxx
Xxxxx Xxxxxxx
_________________
Total
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ANNEX I
-------
Required Shareholder Lock-ups
-----------------------------
Xxxxx Xxxxxxxx
Xxxxx Xxxxxxx
Xxxxxx Xxxxxxxx
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